PRECIOUS-Gold falls on revived prospects for U.S.-N.Korea summit

3 Min Read

* Safe-haven demand dwindles
* U.S. team in N.Korea to prepare for summit
* Dollar strengthens to new 2018 high
* Gold falls below $1,300
* COMEX net long at 10-month low
(Updates prices)
By Peter Hobson
LONDON, May 28 (Reuters) - Gold prices fell for a second
session on Monday after U.S. President Donald Trump revived
hopes that he would meet North Korean leader Kim Jong Un next
month, lowering political tensions and demand for gold as a safe
haven investment.
The dollar also strengthened to a 2018 high, pressuring gold
by making it more expensive for buyers holding other currencies.
Spot gold slipped by 0.2 percent to $1,298.42 an
ounce by 1355 GMT, while U.S. gold futures for June
delivery were down 0.5 percent at $1,297.80.
Trading volumes were low, with New York and London markets
closed for public holidays.
Trump last week pulled out of the June 12 summit, pushing
gold above $1,300 an ounce, but then reversed his decision and
said on Sunday that a U.S. team had arrived in North Korea to
prepare.
"It looks like there is some chance of a meeting between the
U.S. and North Korean leaders that would lower geopolitical
risks and lessen the appeal of gold," said National Australia
Bank economist John Sharma.
Gold is traditionally used as a safe place to store assets
during times of uncertainty.
Gold had been trading between about $1,310 and $1,360 since
hitting a 1-1/2 year high in January, but it was pushed lower
this month as the dollar strengthened.
Speculative bets on higher prices have fallen sharply, with
funds' net long position in COMEX gold falling to its lowest
level in 10 months.
Prices are now trapped between gold's 200-day moving average
at $1,307 and Fibonacci support at $1,286, said Saxo Bank
analyst Ole Hansen.
"The potential for fireworks is biggest on the upside given
the sharp reduction we have seen in speculative longs," he said.
"If we do break higher, the funds will have to chase the market
to rebuild their long positions."
In other precious metals, spot silver was down 0.1
percent at $16.46 an ounce.
Speculative investors have become less pessimistic about
prices, with data on Friday showing their net short position in
COMEX sliver at its lowest since February 2014. [ ]
Platinum was up 0.9 percent at $904.20 while
palladium had gained 0.3 percent to $982.47.
(Additional reporting by Swati Verma in Bengaluru
Editing by David Goodman and Edmund Blair)